Gone are the times when for 1,200 euros you could mount a top-of-the-range gaming PC . The price of graphics cards has been running wild for a few years now, and today top-of-the-range graphics cost more than a gaming PC, to the point that mid-range graphics already cost much more than what the flagships of a few years ago. Why is the price of the graphs getting higher and higher and it won’t stop rising?
Many of you will say that the fault is inflation, the price of money. The reality is that although we cannot deny that inflation also has to do with the increase in the price of hardware components, its part of the blame is actually quite small compared to the rest of the factors, and it is precisely these of the that we are going to talk about today in this article.
What defines the price of graphics cards?
There are many factors that determine the price that consumers pay for a product such as a graphics card, and although it is true that the same can be applied to other components such as processors or motherboards, in GPUs the “problem” is a bit more pressing than in the rest of the segments due to the demands of users, and we are not referring to legal demands but to what people, as PC users, ask and demand from manufacturers.
A few years ago, gaming at Full HD resolution and 60 FPS was what we were all looking for, but these days this has also been left behind and every time we have gaming monitors with higher resolutions and higher refresh rates to have a better gaming experience. game, which forces to raise the performance levels considerably. At the same time, the graphic quality of the games has been significantly increased and that is what the users ask for (photo-realism). Right now we could say that gaming at 4K resolution and 60 FPS or Full HD and 240 FPS are the brands to beat, and obviously this requires more and more powerful graphics cards.
The cost of research and development
Of course, getting to create more powerful graphics cards entails a greater effort, both human and economic, for manufacturers. Both AMD and NVIDIA -and in recent times, even Intel– have had to make heavy investments in R&D to develop new generations of graphics, much more capable than those of previous generations and whose objective is to be able to provide the best high resolution gaming experience, graphics settings, and frame rates per second.
As you will already suppose, a greater investment in this entails a greater cost to create the final product, so the price at which they have to sell it is increased to bring benefits with it. The graphics cards of today are not only much more powerful than those of yesteryear, but they also have technologies developed specifically for games that have made them even more expensive (for example, ray tracing, DLSS, AI, etc.).
Manufacturing cost, raw materials, and component shortages
We are all clear that the demand for “gaming” products is booming, and many manufacturers are being overwhelmed. Both NVIDIA and AMD stated that they are in a shortage situation because they do not receive enough chips to be able to manufacture their products, manufacturers do not provide enough and this is further worsened by the shortage of some raw materials. This has meant that primary manufacturers have raised their products and canceled discounts, as TSMC announced, something that again affects the price we pay for products such as graphics cards.
And it is that unfortunately when there is a shortage of a product what primary manufacturers tend to do is raise the price of their products with a double objective: to get more profit from what they sell, but also to sell less and reduce this situation of scarcity (according to they say themselves the price increase is precisely to alleviate selling less). Be that as it may, they do not want to lose but rather the opposite, and those who pay more in the end are the consumers.
Is the price we pay for graphics cards fair?
As we have explained, the price we pay for graphics cards today (and at any time in the future) is the result of a sum of circumstances, such as the manufacturer’s investment in R&D, supply and demand that They cause shortages or overstock, the cost of raw materials and the capacity of the chipmakers, added of course to the percentage of profit that the manufacturers want to get from their products.
Entering to assess whether the price we pay for graphics cards is fair or not is something of course subjective, since ultimately only NVIDIA and AMD know what cost they have for them both at the development and manufacturing level. However, if we see, for example, the financial results report of a company like NVIDIA, with quite high margins compared to other manufacturers, we can determine that without a doubt this manufacturer sells its products with a very, very high profit margin. , which means that they could easily sell them considerably cheaper (although that would mean having less profit, something that they will surely not be willing to accept).
Unfortunately, the market trend has brought us to this situation and consumers have no choice but to go through the hoop, as long as we want to have the best performance of course, since all manufacturers continue to have models in the entry ranges and low, with much more reasonable prices for all types of users, especially those with tight pockets. The summary of this is that “if you want the best, you have to pay for it”, presumably.